STRATEGIC INVENTORY OPTIMIZATION |
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| Authors: | Jeremy F Shapiro Stephen N Wagner |
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| Institution: | 1. Massachusetts Institute of Technology;2. (Ph.D. Stanford University) is Professor Emeritus in the Sloan School of Management at MIT. For nine years he served as Co‐Director of MIT's Operations Research Center. He is also President of J. F. Shapiro Associates, a firm specializing in the application of modeling systems for supply chain management and other business problems. Dr. Shapiro is the author of Modeling the Supply Chain, 2nd ed., published by Duxbury Press in 2007.;3. Analysis Dynamics, LLC;4. (MBA DePaul University) has consulted for over 20 years in the areas of supply chain strategy and decision support systems, serving over 30 clients and performing over 20 supply chain network design studies. Prior to consulting, Steve held positions as Director, Information Services, with Catenation, and Senior Manager, Logistics Planning, with FedEx. Steve has a MBA in Finance from DePaul University, and a B.S. in Mathematics and Business Economics from Benedictine University. |
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| Abstract: | A company's inventory metrics are often viewed as critical indicators of its supply chain performance although inventory costs are only a fraction of total supply chain costs comprised of supplier, manufacturing, transportation, and warehousing costs, as well as inventory costs. Moreover, inventories across the supply chain are dependent on acquisition and distribution decisions. We discuss how simulation and optimization models can be combined to integrate analysis of inventory and supply chain network design decisions in performing a total cost analysis. An application of the models to plans for distributing retail products to an expanding network of stores is reviewed. |
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| Keywords: | Inventory simulation Retail products distribution Strategic inventory deployment Supply chain network optimization |
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